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Pa. Lawmakers Propose New School Funding Formula, as Tax Hikes Loom


Pennsylvania is poised to dramatically change the way it funds schools.

On June 18 the state's Basic Education Funding Commission released a proposed K-12 finance system in the Keystone State, which has been tagged by experts as the only state not using a coherent, consistent formula to fund public schools. The formula would provide additional funding for individual students from low-income backgrounds, as well as for students in districts with large concentrations of poverty.

The proposed system was released at the time when the majority of school districts are reportedly planning to increase their property tax rates to shore up their budgets.

Below are some details about the proposed Basic Education Funding (BEF) formula. The weights referred to below are the proportion of base per-student funding that would be added to a base of 1.0. So for example, the weight of "0.6 for students in deep poverty" would mean the per-pupil funding for that student would be 1.6 times the base per-pupil level.

  • Poverty. Applies a weight of 0.6 for students in acute poverty (those from households with income at up to 99 percent of the federal poverty level) and 0.3 for students in poverty (between 100 and 184 percent of the federal poverty level). The federal poverty line is defined as an annual income of $24,250 for a family of four.
  • Poverty Concentration. In addition, for districts where acute poverty concentration is 30 percent or higher, applies a weight of 0.3 for each student in acute poverty.
  • English Language Learners. Applies a weight of 0.6  for each ELL student.
  • Charter School Enrollment. Applies a weight of 0.2 for each charter school student.

Beyond weights for students, the recommended formula also takes into account two local factors: the "effort" of districts as measured by property tax revenues, and the tax base districts have to draw revenue from. For example, high-spending districts would receive less state funding, while districts with relatively small tax bases would receive additional state funding in the proposed formula. 

Small rural districts would also receive a boost through a "sparsity" index. And the median household income for districts would also be taken into account.

Here's a visualization of how the funding formula works, from the commission's report:

BEFPennsylvania.PNG

"There's something for everybody to like in the new formula," said state Rep. James Roebuck, a Democrat and member of the commission when it met June 18 to discuss its recommendations.

As a first step, the proposal would help change "the most inequitable school funding system in the country," said state Secretary of the Budget Randy Albright. He added that the system can't be solved immediately even through the proposed formula. 

The commission, made up of state lawmakers, unanimously approved the final report and sent it to the state legislature for consideration.

A couple of key points:

• The commission's report does not suggest a dollar amount the state should provide to fund the formula. (More on that below.)

• It's not yet clear whether the proposed formula would impact the upcoming school year or the 2016-17 school year, assuming it's adopted in the first place. According to the Pennsylvania Association of School Administrators, Gov. Tom Wolf wants to use it in the 2016-17 academic year, but some lawmakers want to put it in place for the 2015-16 year. 

Turmoil in the Keystone State

I wrote about the state's precarious K-12 budget situation at the start of this year. It's long been classified as the only state that doesn't use a codified funding formula. Huge funding disparities between districts, due to the subsequent heavy reliance on local property taxes, often result.

But the drawn-out creation of a new funding formula has been hampered by several issues. These include the state's stale economic climate, and concerns that a new formula would create new winners and losers, a politically fraught development particularly for state lawmakers representing the "loser" districts in the legislature. 

Wolf, a Democrat in his first year in office, has proposed a big boost to K-12 aid, one of his major campaign promises last year. But his proposal to add $400 million to general education spending has stalled out in the legislature, which is run by Republicans. In fiscal 2015, basic state aid to schools is about $5.5 billion.

A recently released survey by two K-12 associations in the state underscores the trouble many Pennsylvania districts face in the current school finance climate. The June 15 survey of districts found that 71 percent plan to raise local property taxes to help their budgets, and 41 percent plan to reduce their staff, according to the Pennsylvania Association of School Business Officials, and the Pennsylvania Association of School Administrators. 

In its fourth annual report card on school funding fairness, released earlier this month, the Education Law Center, based in New Jersey, reported that Pennsylvania has a regressive K-12 finance climate, since it has more pupils per teacher in high-poverty districts than in low-poverty districts. The group also classified the state as regressive in terms of revenue per pupil correlated with the district's poverty rate. Pennsylvania is represented by the red line in the figure below:

PAGraph.PNG

Read the commission's full set of recommendations below:


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